Jose, who is in the $35$ percent marginal tax bracket with a $15$ percent tax rate on dividends, owns $100$

percent of the stock of JJ$,$ Incorporated. This year, JJ generates $$545,000$ taxable income and pays a

$$108,000$ dividend to Jose. Compute his tax on the dividend under each of the following assumptions:

Required:

a$.$ The federal tax rules currently in effect apply to the dividend payment.

b$.$ The federal tax system has been amended to allow shareholders to gross up dividend income by the

corporate tax paid with respect to the dividend and credit this tax against their individual tax.

Complete this question by entering your answers in the tabs below.

Required A

Required B

Compute his tax on the dividend assuming the federal tax system has been amended to allow shareholders to $g$

dividend income by the corporate tax paid with respect to the dividend and credit this tax against their individu $\frac{?}{\text{b}\text{a}\text{r}}(c)$